Failing Health Care Co-ops Will Cost Taxpayers

Consumer Operated and Oriented Plan Programs (COOPs) were really a political compromise between Members of Congress who wanted a public plan option and those who didn’t. Once the Affordable Care Act passed, COOPs had outlived their usefulness. However, they are now failing and will cost taxpayers plenty. Senior Fellow Devon Herrick testified before a congressional committee.

Switching to Over-the-Counter Drugs

About 80 percent of the time, patients initially treat their medical problems with over-the-counter drugs. Americans buy OTC drugs more than 5 billion times each year.91 Today's consumer can choose from more than 100,000 different OTC drugs.92And physicians recommend them more frequently than in the past.93 Although most people probably assume prescription drugs have been around as long as doctors,94 in reality virtually all drugs were sold over the counter until the FDA created prescription drugs in 1951.95 Moving some prescription drugs OTC saves patients the cost of a physician visit just to renew a prescription, which may sometimes be valuable, but is probably unnecessary. A recent study by the European Self-Medication Industry found that moving a mere 5 percent of prescription drugs to the OTC market would save public-funded health systems across Europe more than $20 billion a year.96

Drugs Switched from Prescription to Over-the-Counter.97 Increasing access to medications where self-treatment is appropriate is an important way to save money and empower patients to take responsibility for their own health. In the future this will increasingly include medications for chronic ailments.98

The FDA can approve a prescription drug for OTC sale once it decides the benefits outweigh the risks, the potential for abuse is low, consumers can self-diagnose their condition, labels can be easily understood, and the advice of health practitioners is unnecessary. The 90 prescription products the FDA has switched to over the counter during the past 30 years include such familiar brands as Advil, Afrin, Drixoral, Aleve, Pepcid AC, Zantac-75, Nicorrette, Rogaine and Lamisil.99 The FDA also recently approved an OTC version of Xenical (Orlistat) - a fat-blocking drug to promote weight loss. 100

In years past, drugs were usually only switched from prescription to OTC status at the request of the drug maker, and only when patent protection was about to expire.101 In 2002, however, an FDA panel voted to recommend OTC status for Claritin (one of the best-selling allergy medications) on a request from the health plan manager, WellPoint Health Networks. It was the first time the FDA took such action without an initial request from the manufacturer. In response, Claritin's manufacturer asked for OTC status - which the FDA granted - so it would be able to market the drug as a nonprescription medication while it was still under patent.102

When products move to the OTC market their prices drop sharply.103 For example, when Claritin moved to the OTC market in December 2002,104 sales increased dramatically, but the dollar-value of prescription antihistamines fell 28 percent the following year due to lower prices for Claritin.105

Utilizing OTC medications can save patients money. For instance:

Before moving to the OTC market, prescription Claritin cost $2.92 per day;106 currently, OTC Claritin costs 52 cents per day at Costco, and its generic equivalent costs as little as five cents per day at Sam's Club.107

Before moving to the OTC market, Prilosec cost $122.99 for 30 capsules at Walgreens.com, a daily cost of about $4.10;108 currently, Costco.com sells a box of OTC Prilosec with 42 capsules for $25.99, or a daily cost of 62 cents.109

Recently, however, FDA approval for OTC sale has slowed dramatically; in the past five years, it has reclassified only seven prescription drugs (including the best-selling drugs Claritin and Prilosec). Over a 20 year period, by contrast, European countries approved about four times as many prescription medications for OTC sale as the United States, according to a 2003 report from the Tufts Center for the Study of Drug Development.110

Missed Opportunity. Consumers lost a money-saving opportunity when an FDA advisory panel voted against OTC access to the cholesterol-reducer Mevacor.111 This is the third time the FDA has turned down a request to make cholesterol-lowering drugs available without a prescription, thus denying consumers the power to control an important aspect of their medical care.

Why should consumers be concerned? Cholesterol control medicine is the most widely used type of prescription drug from the powerful class of medications known as statins. For instance, Lipitor, a popular prescription cholesterol-reducer, has been the best-selling drug in the United States for the past several years. Several other cholesterol medications round out the top 50 drugs most widely used by seniors. Americans spend about $14 billion per year on cholesterol reducers. Add the cost of diagnostic tests and doctor visits to obtain prescriptions and this figure probably approaches $20 billion per year.

Depending on the guidelines used, an estimated 40 million to more than 100 million Americans have high cholesterol. Many of them could benefit from a cholesterol-reducing drug, but aren't currently taking one. Most don't seek treatment because it is inconvenient and expensive to visit a doctor and pay for prescription medication.

Statins can reduce the risk of cardiac events, such as heart attacks, by nearly one-third. These drugs are so beneficial that some health experts compare them to the public health benefits of fluoride. A recent BBC news feature whimsically asked, "Is the threat of cardiovascular disease so great that statins may as well be added to the water supply?"112 Another recent article appearing in the prestigious British Medical Journal declared, "Statins are the new aspirin...."113 On balance, the benefit of statins far outweighs their risks, spurring the British government to approve an OTC version of the cholesterol-control drug Zocor in 2004.114